Correlation Between Forum Energy and Enservco
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Enservco at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Forum Energy and Enservco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Technologies and Enservco Co, you can compare the effects of market volatilities on Forum Energy and Enservco and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Forum Energy with a short position of Enservco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Enservco.
Diversification Opportunities for Forum Energy and Enservco
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Forum and Enservco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Technologies and Enservco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enservco and Forum Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Forum Energy Technologies are associated (or correlated) with Enservco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enservco has no effect on the direction of Forum Energy i.e., Forum Energy and Enservco go up and down completely randomly.
Pair Corralation between Forum Energy and Enservco
Considering the 90-day investment horizon Forum Energy Technologies is expected to generate 0.39 times more return on investment than Enservco. However, Forum Energy Technologies is 2.53 times less risky than Enservco. It trades about -0.03 of its potential returns per unit of risk. Enservco Co is currently generating about -0.07 per unit of risk. If you would invest 2,826 in Forum Energy Technologies on August 28, 2024 and sell it today you would lose (1,310) from holding Forum Energy Technologies or give up 46.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.27% |
| Values | Daily Returns |
Forum Energy Technologies vs. Enservco Co
Performance |
| Timeline |
| Forum Energy Technologies |
| Enservco |
Forum Energy and Enservco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Enservco
The main advantage of trading using opposite Forum Energy and Enservco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Enservco can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Enservco will offset losses from the drop in Enservco's long position.| Forum Energy vs. ProPetro Holding Corp | Forum Energy vs. RPC Inc | Forum Energy vs. MRC Global | Forum Energy vs. Expro Group Holdings |
| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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